AI chip boom boosted Samsung’s profits by 1,800%

South Korean technology giant Samsung Electronics said it expects to post a 19-fold jump in profits, boosted by global demand for its artificial intelligence (AI) memory chips.

The company predicts it will make 89tn won (£44bn; $58bn) in the period from the beginning of April to the end of June.

Major South Korean companies such as Samsung have released their earnings forecasts ahead of official detailed reports to guide investors.

Samsung’s latest forecast, released on Tuesday ahead of its full results at the end of July, comes as demand for semiconductors continues to outpace supplies – This has increased the price..

Samsung said in its preview earnings guidance that it brought in sales of 171tn won in the quarter, more than double the same period last year.

The company’s projected earnings mark one of its “best quarterly performances ever.” The technology sector record set by Nivea at the beginning of this yearsaid industry analyst Mark Einstein from Counterpoint Research.

“This has something to do with the AI ​​boom as memory companies are riding a wave driven by limited supply and unprecedented demand,” he added.

Samsung is one of the world’s largest semiconductor manufacturers, making chips for companies such as Nvidia and Google. Shares of major technology companies have surged in recent months as demand for the chips soars.

Shares in Samsung have doubled since the start of this year, while South Korean rival SK Hynix is ​​up more than 200 percent.

A strong performance by both firms has helped South Korea’s benchmark share index, the Kospi, soar more than 80 percent this year.